UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549


                                   FORM 10 QSB

            Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


            For the quarterly period ended           September 30, 2001

            Commission file Number                   000-30429


                           PROVIDENCE CAPITAL III, INC.

             (Exact Name of Registrant as Specified in its Charter)


                                     COLORADO
                 (State or Other Jurisdiction of Incorporation)


                000-30429                              05-0508619
        (Commission File Number)         (I.R.S. Employer Identification Number)


      735 Broad Street, Suite 218
        Chattanooga, Tennessee                           37402
(Address of Principal Executive Offices)               (Zip Code)


                                 (423) 265-5062
              (Registrant's Telephone Number, Including Area Code)

<PAGE>

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                         YES [X]        NO [ ]

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date:

Common Stock, No Par Value - 1,700,000 shares as of September 30, 2001.


                           FORWARD-LOOKING INFORMATION

THIS FORM 10QSB AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY
PROVIDENCE CAPITAL III, INC. (THE "COMPANY") OR ITS REPRESENTATIVES CONTAIN
STATEMENTS WHICH MAY CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND 78U-5 (SUPP. 1996). THOSE STATEMENTS
INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS
OF THE COMPANY AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL AS THE
ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED.

PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS
ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES,
AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD-
LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE STATEMENT FOR
FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THIS FORM 10QSB AND
ARE HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES
NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT
CHANGED ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO
FUTURE OPERATING RESULTS OVER TIME.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE> F-1


                           PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                           PROVIDENCE CAPITAL III, INC.
                           (A Development Stage Company)

                                FINANCIAL STATEMENTS
                                    (UNAUDITED)
                  THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
              AND THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                       AND THE PERIOD FROM NOVEMBER 24, 1999
                     (DATE OF INCEPTION) TO SEPTEMBER 30, 2001

<PAGE> F-2

                           PROVIDENCE CAPITAL III, INC.
                           (A Development Stage Company)

                                   BALANCE SHEETS

                                      ASSETS

                                          September 30, 2001   December 31, 2000
                                              (Unaudited)         (Audited)


      TOTAL ASSETS                           $          0   $        0


                      LIABILITIES AND STOCKHOLDERS' DEFICIT


Current liabilities:
  Accounts payable                           $      1,000   $      700
  Loans from officers                              20,275       17,975
    Total current liabilities                      21,275       18,675

Stockholders' deficit:
  Common stock, $.001 par value;
   50,000,000 shares authorized,
    1,700,000 shares issued and
     outstanding                             $      1,700        1,700
  Paid in capital                                   4,760        4,760
  Preferred stock, $.001 par value,
   50,000,000 shares authorized,
    no shares outstanding
  Deficit accumulated during the
   development stage                              (27,735)     (25,135)

      Total stockholders' deficit                 (21,275)     (18,675)

      TOTAL LIABILITIES AND
       STOCKHOLDERS' DEFICIT                 $          0   $        0

SEE NOTES TO UNAUDITED FINANCIAL STATEMENTS

<PAGE> F-3

                           PROVIDENCE CAPITAL III, INC.
                           (A Development Stage Company)

                             STATEMENTS OF OPERATIONS
                                    (UNAUDITED)
                  THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
            AND THE PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION)
                                TO SEPTEMBER 30, 2001

<TABLE>
<CAPTION>

                             Three Months           Nine Months        November 24, 1999
                                Ended                  Ended            (Inception) to
                             September 30,         September 30,      September 30, 2001

                            2001         2000        2001         2000

<S>                       <C>         <C>         <C>         <C>            <C>
Revenue                   $     0     $       0   $       0   $        0     $      0

Expenses:
  Professional fees          1,000          850       2,600        6,021       24,946
  Organization costs                                                            2,789
      Total expenses         1,000          850       2,600        6,021       27,735

Net loss                   $(1,000)   $    (850)  $  (2,600)  $   (6,021)    $(27,735)

Basic Loss
Per Common Share           $  (.00)   $    (.00)  $    (.00)  $     (.00)

Fully Diluted Loss Per
Common Share               $  (.00)   $    (.00)  $    (.00)  $     (.00)

SEE NOTES TO UNAUDITED FINANCIAL STATEMENTS
</TABLE>

<PAGE> F-4

                           PROVIDENCE CAPITAL III, INC.
                           (A Development Stage Company)

                        STATEMENTS OF STOCKHOLDERS' DEFICIT
                                   (UNAUDITED)
                    NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
             AND THE PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION)
                              TO SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                         Common
                                         Stock         Additional
                                                         Paid in
                                    Shares    Amount     Capital    Deficit    Total

<S>                              <C>          <C>      <C>          <C>        <C>
Balance at November 24, 1999             0    $      0 $       0    $       0  $       0

Issuance of common stock:
  Stock issued for services
   rendered at inception           734,000         734                               734
  Additional paid in capital                               2,055                   2,055

Net loss for the period from
 November 24, 1999 through
 December 31, 1999                                                    (18,414)   (18,414)

Balance at December 31, 1999       734,000         734     2,055      (18,414)   (15,625)
 Stock issued for services
  rendered                         966,000         966                               966
 Additional paid in capital                                2,705                   2,705

Net loss for the nine months
 ended September 30, 2000                                              (6,021)    (6,021)

Balance at September 30, 2000    1,700,000       1,700     4,760      (24,435)   (17,975)

Net loss for the three months
 ended December 31, 2000                                                 (700)      (700)

Balance at December 31, 2000     1,700,000       1,700     4,760      (25,135)   (18,675)

Net loss for the nine months
 Ended September 30, 2001                                              (2,600)    (2,600)

Balance at September 30, 2001    1,700,000      $1,700    $4,760     $(27,735)  $(21,275)

SEE NOTES TO UNAUDITED FINANCIAL STATEMENTS

</TABLE>

<PAGE> F-5

                          PROVIDENCE CAPITAL III, INC.
                         (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
               THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
           AND THE PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION)
                            TO SEPTEMBER 30, 2001

<TABLE>
<CAPTION>

                                      Three Months      Nine Months     November 24, 1999
                                         Ended             Ended         (Inception) to
                                      September 30,    September 30,    September 30, 2001

                                          2001     2000     2001     2000

<S>                                       <C>      <C>      <C>      <C>       <C>
Cash flows from operating activities:
  Net loss                                $(1,000) $  (850) $(2,600) $(6,021)  $(27,735)
  Adjustments to reconcile net loss to
   net cash provided by operating
    activities:
  Services performed for stock                                         3,671      6,460
  Increase in accounts payable                400      250      300      850      1,000
      Net cash  used by
       operating activities                  (600)    (600)  (2,300)  (1,500)   (20,275)

Cash flows from financing activities:
  Increase in loan from officers              600      600    2,300    1,500     20,275
  Net cash provided by
   financing activities                       600      600    2,300    1,500     20,275

Increase in cash and cash equivalents           0        0        0        0          0

Cash and cash equivalents,
 beginning of period                            0        0        0        0          0

Cash and cash equivalents,
 end of period                            $     0   $    0   $    0   $    0   $      0

</TABLE>

SEE NOTES TO UNAUDITED FINANCIAL STATEMENTS

<PAGE> F-6
                            PROVIDENCE CAPITAL III, INC.
                           (A Development Stage Company)

                           NOTES TO FINANCIAL STATEMENTS
                                    (UNAUDITED)
                                SEPTEMBER 30, 2001

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Development Stage Operations

	Providence Capital III, Inc. (a Development Stage Company) (the Company)
was incorporated on November 24, 1999, in the State of Colorado.  The Company is
in the development stage and its intent is to operate as a capital market access
corporation and to acquire one or more existing businesses through merger or
acquisition.  The Company has had no significant business activity to date.
Costs associated with organization have been expensed in accordance with SOP
98-5.

Basis of Presentation

	The financial information included herein is unaudited; however, the
information reflects all adjustments that are, in the opinion of management,
necessary to a fair presentation of the financial position, results of
operations, stockholders' deficit, and cash flows for the interim periods.

Stock-Based Compensation

	The Company accounts for stock-based compensation under Statement of
Financial Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based
Compensation".  The Company accounts for stock-based compensation based on the
fair value of the consideration received or the fair value of the stock issued,
whichever is more reliably measurable.

Estimates

	The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes.  Actual results could differ from
those estimates.


Impact of Recently Issued Accounting Standards

	In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), Business
Combinations," which supercedes Accounting Principles Board ("APB") Opinion
No. 16, "Business Combinations."  SFAS No. 141 requires the purchase method
of accounting for business combinations initiated after June 30, 2001 and
eliminates the pooling-of-interests method.  The provisions of SFAS 141 have
been adopted as of July 1, 2001.  The implementation of this standard had no
impact on the Company's results of operations and financial position.

	In July 2001, the FASB also issued Statement of Financial Accounting
Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets," which
is effective for fiscal years beginning after December 15, 2001.  Certain
provisions shall also be applied to acquisitions initiated subsequent to
June 30, 2001.  SFAS 142 supercedes APB Opinion No. 17, "Intangible Assets,"
and requires, among other things, the discontinuance of amortization related
to goodwill and indefinite lived intangible assets.  These assets will then
be subject to an impairment test at least annually.  The implementation of
this standard had no impact on the Company's results of operations and
financial position.

	In October 2001, the FASB issued Statement of Financial Accounting
Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal
of Long-Lived Assets," which supercedes Statement of Financial Accounting
Standards No. 121 ("SFAS 121"), "Accounting for the Impairment of Long-
Lived Assets for Long-Lived Assets to be Disposed Of" and certain
provisions of APB Opinion No. 30, "Reporting Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions."
SFAS 144 requires that long-lived assets to be disposed of by sale,
including discontinued operations, be measured at the lower of carrying
amount or fair value, less cost to sell, whether reporting in continuing
operations or in discontinued operations.  SFAS 144 also broadens the
reporting requirements of discontinued operations to include all
components of an entity that have operations and cash flows that can be
clearly distinguished, operationally and for financial reporting purposes,
from the rest of the entity.  The provisions of SFAS 144 are effective
for fiscal years beginning after December 15, 2001.  The implementation
of this standard had no impact on the Company's results of operations
and financial position.

Earnings Per Share

     During 2001, the Company adopted Statement of Financial Accounting
Standards No. 128 "Earnings Per Share", which requires presentation of basic
earnings per share ("Basic EPS") and diluted earnings per share ("Diluted
EPS").  The computation of Basic EPS is computed by dividing net income by
the weighted average number of outstanding common shares during the period.
Diluted EPS gives effect to all dilutive potential common shares outstanding
during the period.

     The computation of Diluted EPS does not assume conversion, exercise or
contingent exercise of securities that would have an antidilutive effect on
earnings.

     The shares used in the computation are as follows:

                               September 30, 2001       September 30, 2000

     Basic EPS                 1,700,000                1,700,000
     Diluted EPS               1,700,000                1,700,000

(CONTINUED)

<PAGE> F-7

                          PROVIDENCE CAPITAL III, INC.
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)
                               SEPTEMBER 30, 2001


2.	STOCKHOLDERS' EQUITY

     On November 24, 1999, the Company issued seven hundred thirty-four
thousand (734,000) shares of its $.001 par value common stock for services,
rendered by related parties, valued at their fair market value of $2,789.  The
shares were issued pursuant to Rule 701 of the Securities Act of 1933 (the
"Act") and are restricted securities within the meaning of Rule 144 of the Act.

     On June 15, 2000, the Company issued nine hundred sixty-six thousand
(966,000) shares of its $.001 par value common stock for services, rendered by
related parties, valued at their fair market value of $3,671.  The shares were
issued pursuant to Section 4(2) of the Securities Act of 1933 (the "Act") and
are restricted securities within the meaning of Rule 144 of the Act.

     The Company authorized 50,000,000 shares of Series A convertible preferred
stock with a par value of $.001 per share.  Currently, there are no preferred
shares outstanding.  Each share of preferred stock can be converted into one
share of common stock and each share is entitled to one vote, voting together
with the holders of shares of common stock.


3.	RELATED PARTY TRANSACTIONS

     Of the $20,275 of the loan from officers, $15,625 was for legal services
rendered in connection with business planning and compliance.  Those legal
services were rendered by shareholders of the Company.  The balance was for
other professional services paid by the officers.

     As described in footnote #2 the Company issued common stock for services
provided by related parties that are valued at the fair market value of $6,460.


4.	INCOME TAXES

     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  The Company's net
deferred tax asset balances are attributable to net operating loss
carryforwards.  At September 30, 2001, the Company's deferred tax asset
consisted of the following:

     Deferred tax asset                             $ 8,300
     Valuation allowance                             (8,300)
	 Net deferred tax assets recognized
       on the accompanying balance sheets           $     0

(CONTINUED)

<PAGE> F-8

                          PROVIDENCE CAPITAL III, INC.
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 30, 2001


4.	INCOME TAXES (Continued)

     The components of the income tax provision (benefit) consisted of the
following for the three months ended September 30, 2001 and 2000, the nine
months ended September 30, 2001 and 2000, and the period from November 24,
1999 (inception) to September 30, 2001:

                                                             November 24, 1999
                       Three Months Ended  Nine Months Ended  (Inception) to
                          September 30,       September 30,  September 30, 2001

                          2001      2000    2001      2000

Current                   $      0  $    0  $    0    $     0      $      0
Deferred                      (300)   (250)   (900)      (750)       (8,300)
Tentative tax provision
 (benefit)                    (300)   (250)   (900)      (750)       (8,300)
Change in
  valuation allowance          300     250     900        750         8,300
 Net income tax
  provision (benefit)     $      0  $    0  $    0    $     0      $      0

     The Company has a net operating and economic loss carryforward of
Approximately $27,700 available to offset future federal and state taxable
income through 2021 as follows:


             Year of Expiration               Amount

             2019                             $18,400
             2020                             $ 6,700
             2021                             $ 2,600


5.	GOING CONCERN

	The financial statements of the Company have been prepared assuming that
the Company will continue as a going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.
Accordingly, the financial statements do not include any adjustments that might
be necessary should the Company be unable to continue in existence.

	The Company has been in the development stage since its inception in 1999
to present and has incurred substantial cumulative losses from its inception
through September 30, 2001 amounting to $27,735.  The Company's ability to meet
its future obligations is dependent upon its ability to raise capital and close
on the anticipated acquisition of Trade Wind Yachts, Inc. as discussed in Note 6
and 7.  These factors raise doubt about the Company's ability to continue as a
going concern.  The shareholders believe that the necessary capital and the
acquisition of Trade Wind Yachts, Inc. will take place on or after July 2002 and
will provide for the Company to continue as a going concern.


6.	 LETTER OF INTENT

	An initial non-binding agreement has been entered into with Trade Wind
Yachts, Inc. dated September 25, 2001 in which Providence Capital III, Inc.
shall acquire all of the issued and outstanding interests of Trade Wind Yachts,
Inc. from its shareholders on the closing date.  The parties have extended the
closing date of this agreement indefinitely.

(CONTINUED)

<PAGE> F-9

                          PROVIDENCE CAPITAL III, INC.
                         (A Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)
                              SEPTEMBER 30, 2001


7.	SUBSEQUENT EVENT

     Currently, the Company and Trade Wind Yachts, Inc. are anticipating
funding in the amount of $2.7 million from Broad Street Capital Partners I, L.P.
The closing date for the transfer of the funds is scheduled for July 2002.  As
soon as the funding for Trade Wind Yachts, Inc. is finalized, the acquisition of
Trade Wind Yachts, Inc. by Providence Capital III, Inc. will close soon after.

(CONCLUDED)

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
         PLAN OF OPERATION

                           PROVIDENCE CAPITAL III, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                               September 30, 2001

                      =====================================
                      NINE MONTHS ENDING SEPTEMBER 30, 2001
                      =====================================

The following information should be read in conjunction with the historical
financial information and the notes thereto included in Item 1 of this
Quarterly Report.


<PAGE>

General

     The Registrant intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities.  The Registrant has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition.  None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other
company regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this quarterly report.

     While the Company will attempt to obtain audited financial statements of
a target entity, there is no assurance that such audited financial statements
will be available.  The Board of Directors does intend to obtain certain
assurances of value of the target entity's assets prior to consummating such a
transaction, with further assurances that an audited statement would be
provided within seventy-five days after closing of such a transaction.
Closing documents relative thereto will include representations that the value
of the assets conveyed to or otherwise so transferred will not materially
differ from the representations included in such closing documents.

     The Company has filed a registration statement on a voluntary basis
because the primary attraction of the Registrant as a merger partner or
acquisition vehicle will be its status as an SEC reporting company.  Any
business combination or transaction will likely result in a significant
issuance of shares and substantial dilution to present stockholders of the
Registrant.

     The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or
other assets.  However, management believes the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with the acquisition of a business opportunity, including
the costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the "34 Act"),
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying
with the 34 Act.  Nevertheless, the officers and directors of the Company have
not conducted market research and are not aware of statistical data which
would support the perceived benefits of a merger or acquisition transaction
for the owners of a business opportunity.

     As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction.  The
Company is subject to all of the reporting requirements included in the 34
Act.  Included in these requirements is the affirmative duty of the Company to
file independent audited financial statements as part of its Form 8-K to be
filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial statements

<PAGE>

included in its annual report on Form 10-K (or 10-KSB, as applicable).  If
such audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements
of the 34 Act, or if the audited financial statements provided do not conform
to the representations made by the candidate to be acquired in the closing
documents, the closing documents may provide that the proposed transaction
will be voidable, at the discretion of the present management of the Company.

     The Company's officers and shareholders have verbally agreed that they
will advance to the Company any additional funds which the Company needs for
operating capital and for costs in connection with searching for or completing
an acquisition or merger.  These persons have further agreed that such
advances will be made in proportion to each person's percentage ownership of
the Company.  These persons have also agreed that such advances will be made
interest free without expectation of repayment unless the owners of the
business which the Company acquires or merges with agree to repay all or a
portion of such advances.  Such repayment will in no way be a condition to the
selection of a target company.  There is no dollar cap on the amount of money
which such persons will advance to the Company.  The Company will not borrow
any funds from anyone other than its current shareholders for the purpose of
repaying advances made by the shareholders, and the Company will not borrow
any funds to make any payments to the Company's promoters, management or their
affiliates or associates.

     The Balance Sheet as of 09/30/2001 reflects $0.00 assets and no entry
of organizational costs in accordance with SOP 98-5.  The Statement
of Operations has been revised to update cumulative amounts, while conforming
changes have been made to the Statement of Changes in Stockholders' Equity.

     As of the date of this report, the Company has no assets and a Deficit
accumulated during the development stage of $27,735. The Company has also
incurred a net loss to date of $27,735.

Liquidity and Capital Resources

     The Company remains in the development stage and, since inception,
has experienced no significant change in liquidity or capital resources or
stockholder's equity.  The Company's balance sheet as of September 30, 2001,
reflects a total asset value of $0.00.  The Company has no cash or line of
credit, nor does it expect to have one before a merger is effected.

     The Company will carry out its plan of business as discussed
above.  The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.

Results of Operations

     During the period from January 1, 2001 through September 30, 2001, the
Company has engaged in no significant operations other than organizational
activities, acquisition of capital and preparation for registration of its
securities under the Securities Exchange Act of 1934, as amended.  No
revenues were received by the Company during this period.

<PAGE>

     For the current fiscal year, the Company anticipates incurring
a loss as a result of organizational expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates.  The
Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues, and may
continue to operate at a loss after completing a business combination,
depending upon the performance of the acquired business.

Need for Additional Financing

     The Company believes that its existing capital will be sufficient to
meet the Company's cash needs, including the costs of compliance with the
continuing reporting requirements of the Securities Exchange Act of 1934,
as amended, for a period of approximately one year.  Accordingly, in the
event the Company is able to complete a business combination during this
period, it anticipates that its existing capital will be sufficient to allow
it to accomplish the goal of completing a business combination.  There is no
assurance, however, that the available funds will ultimately prove to be
adequate to allow it to complete a business combination, and once a business
combination is completed, the Company's needs for additional financing are
likely to increase substantially.


                          PART II  OTHER INFORMATION

ITEM 1.  Legal Proceedings

          Neither the Registrant nor any of its affiliates are a
          party, nor is any of their property subject, to material
          pending legal proceedings or material proceedings known
          to be contemplated by governmental authorities.


ITEM 2.  Changes in Securities

          None


ITEM 3.  Defaults Upon Senior Securities

          None


ITEM 4.  Submission of Matters to a Vote of Security Holders

          None


ITEM 5.  Other Information

          None

<PAGE>  12

ITEM 6.  Exhibits and Reports on Form 8 K

         a.  Exhibits

             None

         b.  Reports on Form 8 K

             None


                                 INDEX TO EXHIBITS


EXHIBIT      NO      DESCRIPTION


#            3.1     Articles of Incorporation of the Registrant, as amended;

#            3.2     Bylaws of the Registrant;

#            4.1     Instruments Defining Rights of Security Holders/Minutes
                     of Annual/Special Meetings of the Registrant;

#           10.1     Issuance of Restricted Shares from Authorized Shares;

#           23.1     Consent of Nadeau & Simmons, P.C.;

_______________________
x     Filed herewith.

#     Incorporated by reference from the Registrant's Registration Statement
      filed on Amendment No. 3 to Form 10-SB on or about August 1, 2000.

<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                           PROVIDENCE CAPITAL III, INC.

                                           Nadeau & Simmons, P.C.

DATE: July 26, 2002                        By: NADEAU & SIMMONS, P.C.
                                           Title: Filing Agent